The S&P 500 reached a new 10 month high on Wednesday, in a global rally sparked by last Friday’s disappointing jobs report that showed the US added only 38,000 new jobs, its weakest showing since 2010. That’s right. Weak US growth led to a global asset rally because it took June Fed hikes off the cards. Not what one would call a convincing sustainable rally. As we can see in Fig 1 below, USD Index was the top cross asset outlier with a -3sd plunge, while just about everything else rose.
Fig. 1. Cross asset FNA Correlations 8 June 2016
USD continues to be a major systemic pressure point, and broadly negatively correlated against most major assets. A weaker USD takes off pressure from China, which flows into broad global relief.
Below is a short video focusing on key pressure points and market dynamics using FNA’s cross asset dashboard.
Video 1. Weak 3 June US jobs report sparks global asset rally (3:11 min)